Originally Posted by
trader_jackson
Interesting article, but the reality is that low oil prices impact consumers, and in theory their spending, in a positive way, even if 'the big oil companies' are struggling to produce the billions of dollars of profits they have historically been able to produce. Low oil prices is a 'global tax cut'.
Collapsing house values (which occurred in 2008 as a result of 'stupid' lending on the whole american housing market, eg 110% mortgages) do the complete opposite, and scare everyone... consumers, bankers you name it (we all have to live somewhere right?). I am sure there are many banks who have loaned many billions to many oil/mining companies, some of which will go under as a result of oil and commodity prices being so low... but they would not have loaned (hopefully) anywhere near as much as the amount they would have in the housing market, and therefore the banks themselves won't collapse. In the case of most New Zealand and Australian banks (and potentially other places around the world), they are extremely well capitalized, and the american economy, which is growing nicely, does not rely hugely on oil industry and production.
So while many of these 'big oil companies' may struggle, to say we are heading for any recession close to the 2008 Great Recession as a result I think is very far fetched.